George Osborne plans to increase retirement age to 66

"The state retirement age would rise to 66 within seven years under a Conservative government, ten years earlier than planned, George Osborne will announce today.

"The change, saving £13billion a year from 2016, will be portrayed by the Shadow Chancellor as a tough measure showing how serious he is about reducing the soaring budget deficit, expected to rise this year to £175billion.

"In an announcement apparently timed to coincide with Mr Osborne's speech, the Chancellor Alistair Darling will today propose pay freezes in the coming year for 40,000 GPs, senior NHS managers, judges and top civil servants, with minimal rises for more than 700,000 other public sector workers, including hospital doctors and dentists. Army generals and the lower ranks would be exempt from the pay squeeze in recognition of the pressures that they face in Afghanistan."